Euro/yen has been hot in recent months, pushing to new all-time highs into mid-November around 151.48. “Many trades cross as a proxy for Europe/Asia as a whole,” BNP Paribas’ Fink explains.

Rising ECB rates vs. a slow-to-act Bank of Japan has augmented the euro’s appeal in that cross rate, analysts say.

However, Fink sees limited upside from current levels. “It should top out at 153.00 in the first quarter 2007,” she says, noting the ECB will pull in the reins on additional rate hikes in 2007 once the signs of slower global growth emerge. She forecasted a retreat around 145.00 into the second quarter.